Washington News

House Sends American Health Care Act to Senate

By a vote of 217 to 213, on May 4 the House of Representatives passed the American Health Care Act (AHCA). The bill has been sent to the Senate. Several Senators indicated the future Senate health care bill will reflect their respective views on improving health care.

The House bill is complex and comprehensive. It has ten major sections.

1. Health Care Credits – The former health care subsidies are replaced with credits used to purchase health insurance. Generally, the credits are $2,000 for persons in their 20's and increase to $4,000 for those in their 60's. There are phaseouts of credits for persons with incomes over $150,000. The new credits start in 2020.

8. Medicaid Funding – There is a new per capita grant for state funding of Medicaid. The states will receive block grants and can tailor their plans separately from the federal government. However, states will continue to receive support for elderly or disabled Medicaid recipients using an enrollment method.

9. Health Savings Account – AHCA increases the limits for HSA plans, starting in 2018. The plans may have increased limits of $6,550 for individuals and $13,100 for families. There also are increases in the permitted levels of funding for flexible savings accounts.

10. Taxes Repealed – The 3.8% Medicare tax on investment income is repealed in 2017. The 0.9% Medicare tax on incomes over $200,000 for single persons and $250,000 for married couples is repealed in 2023.

Editor's Note: Health care is a complicated and sensitive topic. This objective description of the basic provisions of AHCA is offered as an educational service for our readers. If and when a Senate health care bill passes, we will offer a similar objective description of that legislation.